The CEO of American Airlines says the once-volatile industry has changed so radically that his company will never lose money again.
Even in a bad year, Doug Parker says, the world’s biggest airline should earn about $3 billion in profit before taxes.
Parker made the declaration at a meeting with analysts and reporters on Thursday.

Also, no plans to shrink the seat pitch to under 30 inches.

https://www.seattletimes.com/business/a ... ney-again/

They might not lose money, but they're definitely losing customers, frequent flyers, and any semblance of standard comparable to DL or UA.

What an idiot, just wait until contracts are up.

Those words will eventually come back to bite him.

He might find the following helpful:

http://www.dictionary.com/browse/hubris?s=t

....read it in an Ancient Greek context.

What a putz, to say something like that.

What an idiot. It won't be long until another major economic crash like 2008, a major terror attack or more severe weather or natural events will kill demand and profits, with a turn to major losses to all airlines.

I came into this thread expecting to see him being misquoted or represented but apparently not. Would like to see more context but either way that is a very odd statement for any business leader to make in any industry.

Doug Parker has proven himself, that's for sure. I admire what he has done, and where he has taken the businesses he has worked on. However, this is something very bold to claim. Nobody can promise the future. We also know that something like a 9/11 or greater always comes as a possibility.

We also know fuel, and we know fuel well. There is no guarantee here in my opinion. If oil went up to $500 per barrel in a year, he can kiss that statement goodbye. I know, very unlikely, but we have all stood in shock when things have gone extreme. Heck, what if tomorrow all the oil wells suddenly dried up?

I like his confidence, but that is just a promise I don't think anyone can back.

Oh god - how much worse can AA's catering and AAdvantage possibly get? Enough with the cuts already!

“I've never invested in any airline. I'm an airline manager. I don't invest in airlines. And I always said to the employees of American, ‘This is not an appropriate investment. It's a great place to work and it's a great company that does important work. But airlines are not an investment.’ A lot of people came into the airline business. Most of them promptly exited, minus their money.”

— Robert "Bob" Crandall

Interesting how the perspectives change over the decades.

Excellent indicator that it is time to sell Airline stocks

727LOVER wrote:

The CEO of American Airlines says the once-volatile industry has changed so radically that his company will never lose money again.
Even in a bad year, Doug Parker says, the world’s biggest airline should earn about $3 billion in profit before taxes.
Parker made the declaration at a meeting with analysts and reporters on Thursday.

Also, no plans to shrink the seat pitch to under 30 inches.

Well he did it.. I didn't think I would ever laugh at ANYTHING Doug Parker said but I stand corrected.. OMG I needed that laugh today..

727LOVER wrote:

"The CEO of American Airlines says the once-volatile industry has changed so radically that his company will never lose money again."

Warren Buffett will be happy about this.

Tickling the ears of the stock holders.

I haven't stepped foot on an American Airlines plane since March. The US Airways culture absolutely destroyed the airline and the product is worst in the domestic industry in every aspect - loyalty program, catering, hard product (although admittedly the new 77W J seats are fantastic, and assume the new 789s are, too). Loving Alaska and JetBlue, such a more refreshing experience, especially JetBlue Mint.

USdbaAA (and the other airlines as well) have benefited from a healthy economy, strong travel demand, low fuel prices, and minimal competition (thanks to the mergers). Take away even one of those factors and bye bye profits.

Parker's comments make as much sense as another former CEO who said "you will see changes ahead and I think you will like them"

Funny how Parker has had so much previous success resurrecting airlines and appealing to workers however, I have a feeling everyone has a shelf life and he’s about hit his. AA was in rough shape when Tom Horton ran it and it’s fine now but I think Parker is just stale and I see some employees both pmAWE not happy and the pmAA folk too although they complain a lot anyways (at least the usual twitter suspects).

And here I thought "Never say never" was standard kindergarten advice.

ltbewr wrote:

What an idiot. It won't be long until another major economic crash like 2008, a major terror attack or more severe weather or natural events will kill demand and profits, with a turn to major losses to all airlines.

The airlines are so good at matching capacity with demand now they will just cut accordingly.

DocLightning wrote:

And here I thought "Never say never" was standard kindergarten advice.

Well in that case....

I will never win the powerball within the next 6 months!

77H

What an amazing set of Crystal Balls he must have.

Parker is so uninspiring. AA seemed to be on a real track for renewal before the merger. New image, new products and a sense of optimism. Now it's starting to fall back into that bland mediocrity that plauged US and pre C11 AA. Yes it's a business that has to compete, but hopefully the board and shareholders start to look for some fresh talent.

MAH4546 wrote:

I haven't stepped foot on an American Airlines plane since March. The US Airways culture absolutely destroyed the airline and the product is worst in the domestic industry in every aspect - loyalty program, catering, hard product (although admittedly the new 77W J seats are fantastic, and assume the new 789s are, too). Loving Alaska and JetBlue, such a more refreshing experience, especially JetBlue Mint.

Agreed 100%. Although in my case, I haven't flown them since 2012. It's a shame, I used to enjoy flying with them. My loyalty is with Delta.

Not a smart thing to say, by a CEO or ANY top leadership person of ANY company. "Never" is an AWFULLY LONG time!

I happen to love American Airlines. I have always been treated with wonderful customer service by their employees, as well as when I flew on Us airways.

Never is a long time.

This has to be the stupidest thing I've ever heard an airline CEO say.

727LOVER wrote:

The CEO of American Airlines says the once-volatile industry has changed so radically that his company will never lose money again.
Even in a bad year, Doug Parker says, the world’s biggest airline should earn about $3 billion in profit before taxes.
Parker made the declaration at a meeting with analysts and reporters on Thursday.

Also, no plans to shrink the seat pitch to under 30 inches.

https://www.seattletimes.com/business/a ... ney-again/

Can't wait to see this one come back to bite him in the rear end....

Then again, he could be right. They'll find new sources of revenue to offset any increase in labor and fuel costs, such as turning flight attendants into commercial pitchmen. Instead of the current 3 or 4 announcements to sign up for an AA branded credit card per flight, they will find sponsors for all aspects of the flight, such as the safety briefing.
"Welcome to this flight's safety briefing, sponsored by MetLife. If you wish to purchase a life insurance policy effective immediately after purchase, notify your flight attendant before takeoff."
"Today's air traffic hold sponsored by Bejeweled. Bored and nothing to do? Download Bejeweled for your phone to entertain yourself during this interminable wait."

MAH4546 wrote:

I haven't stepped foot on an American Airlines plane since March. The US Airways culture absolutely destroyed the airline and the product is worst in the domestic industry in every aspect - loyalty program, catering, hard product (although admittedly the new 77W J seats are fantastic, and assume the new 789s are, too). Loving Alaska and JetBlue, such a more refreshing experience, especially JetBlue Mint.

I agree entirely. Everything has deteriorated under the US Airways culture. It's like Parker forgot that he's running a legacy airline and still thinks he's running a hybrid LCC/legacy.

[*]

MAH4546 wrote:

I haven't stepped foot on an American Airlines plane since March. The US Airways culture absolutely destroyed the airline and the product is worst in the domestic industry in every aspect - loyalty program, catering, hard product (although admittedly the new 77W J seats are fantastic, and assume the new 789s are, too). Loving Alaska and JetBlue, such a more refreshing experience, especially JetBlue Mint.

Funny, I have been on several flights. Every one of them packed to the gills. It does not appear by my experience that the airline is "destroyed."

TVNWZ wrote:

[*]

MAH4546 wrote:

I haven't stepped foot on an American Airlines plane since March. The US Airways culture absolutely destroyed the airline and the product is worst in the domestic industry in every aspect - loyalty program, catering, hard product (although admittedly the new 77W J seats are fantastic, and assume the new 789s are, too). Loving Alaska and JetBlue, such a more refreshing experience, especially JetBlue Mint.

Funny, I have been on several flights. Every one of them packed to the gills. It does not appear by my experience that the airline is "destroyed."

Just because the seats are full does not mean that the customer service of the "Old AA" has not been destroyed. They are nothing but a Spirit Airlines wannabe now.

itchief wrote:

TVNWZ wrote:

[*]

MAH4546 wrote:

I haven't stepped foot on an American Airlines plane since March. The US Airways culture absolutely destroyed the airline and the product is worst in the domestic industry in every aspect - loyalty program, catering, hard product (although admittedly the new 77W J seats are fantastic, and assume the new 789s are, too). Loving Alaska and JetBlue, such a more refreshing experience, especially JetBlue Mint.

Funny, I have been on several flights. Every one of them packed to the gills. It does not appear by my experience that the airline is "destroyed."

Just because the seats are full does not mean that the customer service of the "Old AA" has not been destroyed. They are nothing but a Spirit Airlines wannabe now.

Spirit's doing just fine these days, so I would imagine a lot of airlines around the world would "wannabe" Spirit.

sw733 wrote:

itchief wrote:

TVNWZ wrote:

[*]

Funny, I have been on several flights. Every one of them packed to the gills. It does not appear by my experience that the airline is "destroyed."

Just because the seats are full does not mean that the customer service of the "Old AA" has not been destroyed. They are nothing but a Spirit Airlines wannabe now.

Spirit's doing just fine these days, so I would imagine a lot of airlines around the world would "wannabe" Spirit.

I am sure there are loads of customers that fly Spirit for the Customer service and perks you get for flying with them. AA used to be considered a "FULL" service airline, not an LCC. Everyones experience may differ. I have 2,000,000 miles on AA, 400,000 on United, 350,000 on Delta. I do not care for the LCC way of business when I fly. To each their own when choosing. Destroyed in the sense of customer service and how Wall Street want the airline to be are worlds apart.

jeffrey1970 wrote:

I happen to love American Airlines. I have always been treated with wonderful customer service by their employees, as well as when I flew on Us airways.

I did love American Airlines - I flew around a hundred thousand miles with them(and BA, Cathay and Qatar) each year for the last five. I've had a lot of good experiences, a few amazing experiences and a small number of bad ones. Unfortunately with the complete devaluation of AAdvantage I've had to rethink my allegiance to an airline that forces me to connect on my most frequently traveled route and I decided it just wasn't worth it anymore so I now fly them when it makes sense and not when it doesn't.

ltbewr wrote:

What an idiot. It won't be long until another major economic crash like 2008, a major terror attack or more severe weather or natural events will kill demand and profits, with a turn to major losses to all airlines.

Well, WN didn't lose $$ after 9/11...one of the few, if not only, airlines to pull off that feat (while the rest were taking gov't bailouts to cover-up their gross mismanagement).

For a long time I held top status on TW, then NW and finally DL. I travel over 150K a year. But, DL changed their business strategy that did not favor my buying strategy. So, I changed strategy. I now just fly the airline that is the most convienant. I have little to no loyalty.

FF programs have become almost inconsequential since I usually buy the product I want. From my perspective almost all the major airlines are alike except for WN which has a different strategy. I think travelers who have been with one airline for a long time often get tired of the same old thing and look for something different. A consistant product can also be seen by some as a consistantly boring product after several years.

From my seat, all airlines are full right now. The service is predictable and mostly tolerable.
And perks are mostly superficial except for the big seats.

I'm shocked by how many people are hoping his words come back to bite him. I hope they don't, his statement reminds me of something Oscar Munoz said at a town hall where he said something to the effect that if the industry learns from its past mistakes we should not have to worry about bankruptcy ever again. As much as people take to this cite and bash the US3 we tend to forget the US3 combined employs hundreds of thousands of people worldwide and when an airline looses money it not only effects the airline it effects the employees which in turn effects the employees family.
I like when airlines succeed and are profitable it makes for a better place to work. I realize it is people who make the airline and that because of the success of the airline they are able to keep a roof over their head, food on the table, put their children through school, take care of their aging parents and many other things. I don't know about international carriers but now the US3 and WN seem to paying their employees who've reach mid to top scale a livable wage; a wage where employees no longer have to work 2 to 3 jobs just to make ends meet. Every airline employee I know wants to see their airline succeed no one wants to go through another bankruptcy because those of us who live through it understand the effects bankruptcy has on everyone who connected to that airline.
I understand every industry has its ups and down the airlines are no exception but I hope AA, DL and UA have learned from past mistakes, I hope other airlines have learned from their mistakes so that we don't repeat the bankruptcy nightmare in the future. Even though AA is UA's competitor I have friends who work for AA so I most certainly do not want to see Doug Parker's words come back to bite him like some of you are hoping they will.

787fan8 wrote:

This has to be the stupidest thing I've ever heard an airline CEO say.

MO'L: It's a slow press day, let me come up with a dumb idea to drive folks to the website.

Parker: Hold my beer...

a320fan wrote:

Parker is so uninspiring. AA seemed to be on a real track for renewal before the merger. New image, new products and a sense of optimism. Now it's starting to fall back into that bland mediocrity that plauged US and pre C11 AA. Yes it's a business that has to compete, but hopefully the board and shareholders start to look for some fresh talent.

Agreed..and a very stupid statement to make. Just one NOKO rocket in the wrong spot...game over ( or on!??) Very cavalier remark by Doug. I have been a loyal AA customer sine 1981..while being quite aware of all the changes in almost everything in our lives since then, I can tell you one thing, I am tired of the degradation of service, attitude and treatment of customers in almost all aspects of travel. As a "Lifetime Platinum" customer it is disheartening to see the shine come off AA (literally and figuratively) . (and I was a stockholder several times)

It would not take a whole lot to make customers feel appreciated again. Say a second or even third drink service on longer domestic flights. Flight attendants are paid to work, not sit in the back and chat. A little extra effort goes a long way. Getting operations to a very reliable state again where the advertising tag "The On-Time Machine" is true. Or the attitude that existed post 9-11..where every customer was valued. Many of us traveled to show we were not afraid. Yeah, I'm venting a tad..But if anyone at AA reads this..you have the ability to make AA the best again..Why not do it??

Tan Flyr wrote:

Or the attitude that existed post 9-11..where every customer was valued.

Except, unless we're paying to sit up front, we're not anymore...to the airlines, we're nothing more than an endless source of ancillary fee milking...and after that, we're just a burden for them to transport from point A to B.

It would not surprise me if this came to be true. The transformation of the industry into a tight oligopoly allows them to be much more restrained in actually competing.

itchief wrote:

sw733 wrote:

itchief wrote:

Just because the seats are full does not mean that the customer service of the "Old AA" has not been destroyed. They are nothing but a Spirit Airlines wannabe now.

Spirit's doing just fine these days, so I would imagine a lot of airlines around the world would "wannabe" Spirit.

I am sure there are loads of customers that fly Spirit for the Customer service and perks you get for flying with them. AA used to be considered a "FULL" service airline, not an LCC. Everyones experience may differ. I have 2,000,000 miles on AA, 400,000 on United, 350,000 on Delta. I do not care for the LCC way of business when I fly. To each their own when choosing. Destroyed in the sense of customer service and how Wall Street want the airline to be are worlds apart.

I have about that many miles on AA too and have been ExecPlat for the last decade or so...I still like AA. But I've flown Spirit a few times, including a couple of weeks ago, and had good experiences each time. Times change, and for better or worse, I welcome airlines like Spirit - they've allowed people to travel and see places they may not have been able to see 10 or 20 years ago.

AWACSooner wrote:

787fan8 wrote:

This has to be the stupidest thing I've ever heard an airline CEO say.

MO'L: It's a slow press day, let me come up with a dumb idea to drive folks to the website.

Parker: Hold my beer...

I LOLed

Speaks volumes about the effects of consolidation, doesn't it.

People, let's slow down. He's obviously is talking about normal business cycles here.

DP didn't get to where he is by being an idiot, and it feels like politics here where people are playing "gotcha" with this statement.

He might actually not be talking out his bum on this one.

The US airlines have consolidated to the point that we are in some ways back to the days before Deregulation where many routes are served only by a single carrier, improving yields on those flights. And while the Internet has undermined the concept of Yield Management by allowing real-time fare tracking, the airlines have masterminded the use of fees for everything to generate literally billions in additional revenues per year to compensate. And modern traffic modeling has allowed them to optimize scheduling to raise load factors to historical highs by carefully controlling the number of seats deployed on even the most heavily-contested routes.

So all in all, the industry may very well remain profitable going forward.

CobraKai wrote:

People, let's slow down. He's obviously is talking about normal business cycles here.

DP didn't get to where he is by being an idiot [Emphasis added], and it feels like politics here where people are playing "gotcha" with this statement.

A point a-net, armchair CEO's often miss...

OB1504 wrote:

“I've never invested in any airline. I'm an airline manager. I don't invest in airlines. And I always said to the employees of American, ‘This is not an appropriate investment. It's a great place to work and it's a great company that does important work. But airlines are not an investment.’ A lot of people came into the airline business. Most of them promptly exited, minus their money.”

— Robert "Bob" Crandall

Interesting how the perspectives change over the decades.

Nothing has changed. Bob Crandall was right and Doug Parker (an excellent CEO) is dead wrong -- period.

Often, people will make a valid point in a manner that is, shall we say, very inelegant. I think Parker's point is that the airline industry has changed a lot from the 1980s and 1990s, when airlines chased market share and were willing to add seats while cutting fares to fill them.

Airlines are clearly more disciplined. They don't put more seats on a route than they can fill with fares that allow airlines to cover their costs and earn profits that enable airlines to make regular capital investments (aircraft, technology, improved premium product, etc).

I think it was AA who tried to go to four basic fares (F, full Y, 7-day advance purchase, and 21-day advance purchase). For whatever reason, NW decided to implement a fare sale for the entire summer. AA's pricing scheme went out the window, and the bloodbath started. Every airline but WN lost money in Q2 and even more money in Q3.

Airlines don't behave like that now. Unless there is a deep recession that sends unemployment to 7% or more, airlines should remain in the black, even in a mild economic downturn.

Unfortunately, Parker's mouth probably got ahead of his brain.

Doug Parker is one of the most egregiously anti-worker and anti-customer executives in the country, right up there with the CEOs of Wall Street.

It's time for the US government to bring in the Sherman and Clayton Antitrust Acts and break up the airlines (among other industries including banking) and end all ATI JVs. All of this has been the most patently horrid anti-worker action in American history since the Progressive Era, and it's time we cleaned up this mess we've got ourselves in. Enough if enough.